Edgar Filing: VAIL RESORTS INC

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

MTN 2014.01.31 Q2

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2014



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-09614

Vail Resorts, Inc.

(Exact Name of Registrant as Specified in Its Charter)



Delaware		51-0291762
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

390 Interlocken Crescent Broomfield, Colorado		80021
(Address of Principal Executive Offices)		(Zip Code)

(303) 404-1800

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ý Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes ý No

As of March 7, 2014, 36,144,758 shares of the registrant’s common stock were outstanding.

Table of Contents




PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements.	F-1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	19
Item 4.	Controls and Procedures.	20

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings.	20
Item 1A.	Risk Factors.	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	21
Item 3.	Defaults Upon Senior Securities.	21
Item 4.	Mine Safety Disclosures.	21
Item 5.	Other Information.	21
Item 6.	Exhibits.	21

PART I FINANCIAL INFORMATION

Item 1. Financial Statements — Unaudited



Consolidated Condensed Balance Sheets as of January 31, 2014, July 31, 2013 and January 31, 2013						F-2
Consolidated Condensed Statements of Operations for the Three and Six Months Ended January 31, 2014 and 2013						F-3
Consolidated Condensed Statements of Comprehensive Income (Loss) for the Three and Six Months Ended January 31, 2014 and 2013						F-4
Consolidated Condensed Statements of Cash Flows for the Six Months Ended January 31, 2014 and 2013						F-5
Notes to Consolidated Condensed Financial Statements						F-6

F-1

Vail Resorts, Inc.

Consolidated Condensed Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)



	January 31, 2014			July 31, 2013			January 31, 2013
Assets
Current assets:
Cash and cash equivalents	$	205,276		$	138,604		$	136,579
Restricted cash	12,942			12,624			12,194
Trade receivables, net	57,673			79,037			53,486
Inventories, net	72,503			68,318			70,341
Other current assets	54,501			44,886			49,633
Total current assets	402,895			343,469			322,233
Property, plant and equipment, net (Note 6)	1,187,789			1,169,288			1,057,399
Real estate held for sale and investment	184,101			195,230			216,815
Goodwill, net	346,286			348,824			271,762
Intangible assets, net	119,460			121,344			92,590
Other assets	101,443			97,267			42,950
Total assets	$	2,341,974		$	2,275,422		$	2,003,749
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities (Note 6)	$	369,208		$	269,519		$	317,504
Income taxes payable	39,543			42,822			14,979
Long-term debt due within one year (Note 4)	965			994			806
Total current liabilities	409,716			313,335			333,289
Long-term debt (Note 4)	798,319			795,928			489,497
Other long-term liabilities (Note 6)	240,226			242,906			230,157
Deferred income taxes	79,656			85,384			140,704
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued and outstanding	—			—			—
Common stock, $0.01 par value, 100,000,000 shares authorized, 41,091,390, 40,903,731 and 40,855,859 shares issued, respectively	411			409			409
Additional paid-in capital	604,090			598,675			593,424
Accumulated other comprehensive (loss) income	(186		)	(67		)	198
Retained earnings	388,944			418,043			395,175
Treasury stock, at cost, 4,949,111 shares (Note 11)	(193,192		)	(193,192		)	(193,192		)
Total Vail Resorts, Inc. stockholders’ equity	800,067			823,868			796,014
Noncontrolling interests	13,990			14,001			14,088
Total stockholders’ equity (Note 2)	814,057			837,869			810,102
Total liabilities and stockholders’ equity	$	2,341,974		$	2,275,422		$	2,003,749

The accompanying Notes are an integral part of these consolidated condensed financial statements.

F-2

Vail Resorts, Inc.

Consolidated Condensed Statements of Operations

(In thousands, except per share amounts)

(Unaudited)



	Three Months Ended January 31,						Six Months Ended January 31,
	2014			2013			2014			2013
Net revenue:
Mountain	$	391,656		$	361,741		$	448,987		$	413,653
Lodging	56,187			46,543			113,401			99,051
Real estate	4,877			14,167			13,723			26,097
Total net revenue	452,720			422,451			576,111			538,801
Segment operating expense (exclusive of depreciation and amortization shown separately below):
Mountain	243,512			220,997			368,286			328,545
Lodging	53,259			44,803			110,164			96,609
Real estate	8,006			16,739			17,237			32,353
Total segment operating expense	304,777			282,539			495,687			457,507
Other operating expense:
Depreciation and amortization	(36,204		)	(33,418		)	(70,360		)	(65,097		)
Loss on disposal of fixed assets, net	(1,044		)	(531		)	(1,473		)	(533		)
Income from operations	110,695			105,963			8,591			15,664
Mountain equity investment income, net	14			99			617			533
Investment income, net	70			99			165			153
Interest expense	(16,239		)	(8,534		)	(32,337		)	(16,909		)
Income (loss) before (provision) benefit from income taxes	94,540			97,627			(22,964		)	(559		)
(Provision) benefit from income taxes	(35,340		)	(37,098		)	8,727			485
Net income (loss)	59,200			60,529			(14,237		)	(74		)
Net loss attributable to noncontrolling interests	63			22			124			45
Net income (loss) attributable to Vail Resorts, Inc.	$	59,263		$	60,551		$	(14,113	)	$	(29	)
Per share amounts (Note 3):
Basic net income (loss) per share attributable to Vail Resorts, Inc.	$	1.64		$	1.69		$	(0.39	)	$	—
Diluted net income (loss) per share attributable to Vail Resorts, Inc.	$	1.60		$	1.65		$	(0.39	)	$	—
Cash dividends declared per share	$	0.2075		$	0.1875		$	0.4150		$	0.3750

The accompanying Notes are an integral part of these consolidated condensed financial statements.

F-3

Vail Resorts, Inc.

Consolidated Condensed Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)



	Three Months Ended January 31,					Six Months Ended January 31,
	2014			2013		2014			2013
Net income (loss)	$	59,200		$	60,529	$	(14,237	)	$	(74	)
Foreign currency translation adjustments, net of tax	(130		)	159		(119		)	453
Comprehensive income (loss)	59,070			60,688		(14,356		)	379
Comprehensive loss attributable to noncontrolling interests	63			22		124			45
Comprehensive income (loss) attributable to Vail Resorts, Inc.	$	59,133		$	60,710	$	(14,232	)	$	424

The accompanying Notes are an integral part of these consolidated condensed financial statements.

F-4

Vail Resorts, Inc.

Consolidated Condensed Statements of Cash Flows

(In thousands)

(Unaudited)



	Six Months Ended January 31,
	2014			2013
Cash flows from operating activities:
Net loss	$	(14,237	)	$	(74	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	70,360			65,097
Cost of real estate sales	10,104			19,900
Stock-based compensation expense	7,054			6,631
Deferred income taxes, net	(8,727		)	(485		)
Other non-cash income, net	(1,501		)	(4,060		)
Changes in assets and liabilities:
Trade receivables, net	22,396			12,677
Inventories, net	(4,004		)	(3,822		)
Investments in real estate	(570		)	(1,410		)
Accounts payable and accrued liabilities	100,724			87,567
Other assets and liabilities, net	(6,978		)	(6,377		)
Net cash provided by operating activities	174,621			175,644
Cash flows from investing activities:
Capital expenditures	(93,771		)	(58,287		)
Acquisition of businesses	—			(19,958		)
Other investing activities, net	149			246
Net cash used in investing activities	(93,622		)	(77,999		)
Cash flows from financing activities:
Proceeds from borrowings under long-term debt	—			96,000
Payments of long-term debt	—			(96,444		)
Dividends paid	(14,986		)	(13,458		)
Other financing activities, net	621			6,722
Net cash used in financing activities	(14,365		)	(7,180		)
Effect of exchange rate changes on cash and cash equivalents	38			61
Net increase in cash and cash equivalents	66,672			90,526
Cash and cash equivalents:
Beginning of period	138,604			46,053
End of period	$	205,276		$	136,579

The accompanying Notes are an integral part of these consolidated condensed financial statements.

F-5

Vail Resorts, Inc.

Notes to Consolidated Condensed Financial Statements

(Unaudited)


1.	Organization and Business

Vail Resorts, Inc. (“Vail Resorts” or the “Parent Company”) is organized as a holding company and operates through various subsidiaries. Vail Resorts and its subsidiaries (collectively, the “Company”) currently operate in three business segments: Mountain, Lodging and Real Estate.

In the Mountain segment, the Company operates eight world-class ski resort properties at the Vail, Breckenridge, Keystone and Beaver Creek mountain resorts in Colorado; the Heavenly, Northstar, and Kirkwood mountain resorts in the Lake Tahoe area of California and Nevada; the Canyons mountain resort in Park City, Utah; and the ski areas of Afton Alps in Minnesota and Mount Brighton in Michigan ("Urban" ski areas); as well as ancillary services, primarily including ski school, dining and retail/rental operations. These resorts (with the exception of Northstar, Canyons and the Urban ski areas) operate primarily on Federal land under the terms of Special Use Permits granted by the USDA Forest Service (the “Forest Service”).

In the Lodging segment, the Company owns and/or manages a collection of luxury hotels and condominiums under its RockResorts brand, as well as other strategic lodging properties and a large number of condominiums located in proximity to the Company’s ski resorts, National Park Service (“NPS”) concessionaire properties including the Grand Teton Lodge Company (“GTLC”), which operates destination resorts in the Grand Teton National Park, Colorado Mountain Express (“CME”), a Colorado resort ground transportation company, and mountain resort golf courses.

Vail Resorts Development Company (“VRDC”), a wholly-owned subsidiary, conducts the operations of the Company’s Real Estate segment, which owns and develops real estate in and around the Company’s resort communities.

The Company’s mountain business and its lodging properties at or around the Company’s ski resorts are seasonal in nature with peak operating seasons primarily from mid-November through mid-April. The Company’s operations at its NPS concessionaire properties and its golf courses generally operate from mid-May through mid-October. The Company also has non-majority owned investments in various other entities, some of which are consolidated (see Note 7, Variable Interest Entities).


2.	Summary of Significant Accounting Policies

Basis of Presentation

Consolidated Condensed Financial Statements— In the opinion of the Company, the accompanying Consolidated Condensed Financial Statements reflect all adjustments necessary to state fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal recurring nature. Results for interim periods are not indicative of the results for the entire fiscal year. The accompanying Consolidated Condensed Financial Statements should be read in conjunction with the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2013. Certain information and footnote disclosures, including significant accounting policies, normally included in fiscal year financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. The Consolidated Condensed Balance Sheet as of July 31, 2013 was derived from audited financial statements.

Revision of Consolidated Condensed Statements of Cash Flows for Accrued Liabilities for Purchases of Property, Plant and Equipment— The Company previously presented accounts payable and accrued liabilities related to purchases of property, plant and equipment on a gross basis in the Consolidated Condensed Statements of Cash Flows rather than on a net basis. The Company corrected its presentation of accounts payable and accrued liabilities related to purchases of property, plant and equipment to a net basis and has determined that the impact of these adjustments was not material to the Consolidated Statements of Cash Flows for all applicable prior interim and annual periods. In addition, these adjustments had no impact on the net change in cash and cash equivalents. For the six months ended January 31, 2013, the effect of this adjustment increased net cash provided by operating activities from $171.3 million to $175.6 million, with a corresponding increase in net cash used in investing activities from $73.6 million to $77.9 million. For the three months ended October 31, 2013 and 2012, the effect of this adjustment decreased net cash provided by operating activities from $29.3 million to $16.3 million and from $34.6 million to $24.8 million, respectively, with a corresponding decrease in net cash used in investing activities from $46.7 million to $33.7 million and from $35.7 million to $25.9 million, respectively (as previously reported in the quarterly report on Form 10-Q for the three months ended October 31, 2013).

F-6

Use of Estimates— The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Noncontrolling Interests in Consolidated Condensed Financial Statements— Net loss attributable to noncontrolling interests along with net income (loss) attributable to the stockholders of the Company are reported separately in the Consolidated Condensed Statement of Operations. Additionally, noncontrolling interests in the consolidated subsidiaries of the Company are reported as a separate component of equity in the Consolidated Condensed Balance Sheet, apart from the Company’s equity. The following table summarizes the changes in total stockholders’ equity (in thousands):



	For the Six Months Ended January 31,
	2014									2013
	Vail Resorts Stockholders’ Equity			Noncontrolling Interests			Total Stockholders' Equity			Vail Resorts Stockholders’ Equity			Noncontrolling Interests			Total Stockholders' Equity
Balance, beginning of period	$	823,868		$	14,001		$	837,869		$	802,311		$	14,017		$	816,328
Net loss	(14,113		)	(124		)	(14,237		)	(29		)	(45		)	(74		)
Stock-based compensation expense	7,054			—			7,054			6,631			—			6,631
Issuance of shares under share award plans, net of shares withheld for taxes	(4,877		)	—			(4,877		)	(3,792		)	—			(3,792		)
Tax benefit from share award plans	3,240			—			3,240			3,898			—			3,898
Cash dividends paid on common stock	(14,986		)	—			(14,986		)	(13,458		)	—			(13,458		)
Contributions from noncontrolling interests, net	—			113			113			—			116			116
Foreign currency translation adjustments, net of tax	(119		)	—			(119		)	453			—			453
Balance, end of period	$	800,067		$	13,990		$	814,057		$	796,014		$	14,088		$	810,102

Fair Value Instruments— The recorded amounts for cash and cash equivalents, trade receivables, other current assets, and accounts payable and accrued liabilities approximate fair value due to their short-term nature. The fair value of amounts outstanding under the Employee Housing Bonds (Note 4, Long-Term Debt) approximate book value due to the variable nature of the interest rate associated with that debt. The fair value of the 6.50% Senior Subordinated Notes due 2019 (“6.50% Notes”) (Note 4, Long-Term Debt) are based on quoted market prices (a Level 1 input). The fair value of the Canyons obligation (Note 4, Long-Term Debt) has been estimated using discounted cash flow analyses based on the discount rate established under the initial purchase accounting (Note 5, Acquisitions) (a Level 3 input). The fair value of the Company’s Industrial Development Bonds (Note 4, Long-Term Debt) and other long-term debt have been estimated using discounted cash flow analyses based on current borrowing rates for debt with similar remaining maturities and ratings (a Level 3 input). The estimated fair values of the 6.50% Notes, Canyons obligation, Industrial Development Bonds and other long-term debt as of January 31, 2014 are presented below (in thousands):



	January 31, 2014
	Carrying Value		Fair Value
6.50% Notes	$	390,000	$	411,450
Canyons obligation	$	309,093	$	309,093
Industrial Development Bonds	$	41,200	$	46,250
Other long-term debt	$	5,722	$	6,083

F-7


3.	Net Income (Loss) Per Common Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income (loss) attributable to Vail Resorts stockholders by the weighted-average shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, resulting in the issuance of shares of common stock that would then share in the earnings of Vail Resorts. Presented below is basic and diluted EPS for the three months ended January 31, 2014 and 2013 (in thousands, except per share amounts):



	Three Months Ended January 31,
	2014				2013
	Basic		Diluted		Basic		Diluted
Net income per share:
Net income attributable to Vail Resorts	$	59,263	$	59,263	$	60,551	$	60,551
Weighted-average shares outstanding	36,130		36,130		35,895		35,895
Effect of dilutive securities	—		990		—		768
Total shares	36,130		37,120		35,895		36,663
Net income per share attributable to Vail Resorts	$	1.64	$	1.60	$	1.69	$	1.65

The Company computes the effect of dilutive securities using the treasury stock method and average market prices during the period. The number of shares issuable on the exercise of share based awards that were excluded from the calculation of diluted net income per share because the effect of their inclusion would have been anti-dilutive totaled 14,800 and 1,000 for the three months ended January 31, 2014 and 2013, respectively.

Presented below is basic and diluted EPS for the six months ended January 31, 2014 and 2013 (in thousands, except per share amounts):



	Six Months Ended January 31,
	2014						2013
	Basic			Diluted			Basic			Diluted
Net loss per share:
Net loss attributable to Vail Resorts	$	(14,113	)	$	(14,113	)	$	(29	)	$	(29	)
Weighted-average shares outstanding	36,078			36,078			35,798			35,798
Effect of dilutive securities	—			—			—			—
Total shares	36,078			36,078			35,798			35,798
Net loss per share attributable to Vail Resorts	$	(0.39	)	$	(0.39	)	$	—		$	—

The Company computes the effect of dilutive securities using the treasury stock method and average market prices during the period. The number of shares issuable on the exercise of share based awards that were excluded from the calculation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive totaled 1,017,000 and 842,000 for the six months ended January 31, 2014 and 2013, respectively.

During the three and six months ended January 31, 2014, the Company paid cash dividends of $0.2075 and $0.4150 per share, respectively ($7.5 million and $15.0 million, respectively, in the aggregate). During the three and six months ended January 31, 2013, the Company paid cash dividends of $0.1875 and $0.3750 per share, respectively ($6.7 million and $13.5 million, respectively, in the aggregate). On March 10, 2014 the Company’s Board of Directors declared a quarterly cash dividend of $0.4150 per share payable on April 16, 2014 to stockholders of record as of April 1, 2014.


4.	Long-Term Debt

Long-term debt as of January 31, 2014, July 31, 2013 and January 31, 2013 is summarized as follows (in thousands):

F-8



	Maturity (a)	January 31, 2014		July 31, 2013		January 31, 2013
Credit Facility Revolver	2016	$	—	$	—	$	—
Industrial Development Bonds	2020	41,200		41,200		41,200
Employee Housing Bonds	2027-2039	52,575		52,575		52,575
6.50% Notes	2019	390,000		390,000		390,000
Canyons obligation (b)	2063	309,093		306,320		—
Other	2014-2029	6,416		6,827		6,528
Total debt		799,284		796,922		490,303
Less: Current maturities (c)		965		994		806
Long-term debt		$	798,319	$	795,928	$	489,497


(a)	Maturities are based on the Company’s July 31 fiscal year end.

(b)

On May 24, 2013, VR CPC Holdings, Inc. (“VR CPC”), a wholly-owned subsidiary of the Company entered into a transaction agreement (the "Transaction Agreement") with affiliate companies of Talisker Corporation ("Talisker") pursuant to which the parties entered into a master lease agreement (the "Lease") and certain ancillary transaction documents on May 29, 2013 related to the Canyons mountain resort (see Note 5, Acquisitions). The obligation at January 31, 2014 represents future fixed lease payments for the remaining initial lease term of 50 years (including annual increases at the floor of 2%) discounted using an interest rate of 10%, and includes accumulated accreted interest expense of $3.8 million.


(c)	Current maturities represent principal payments due in the next 12 months.

Aggregate maturities for debt outstanding as of January 31, 2014 reflected by fiscal year are as follows (in thousands):



	Total
2014	$	733
2015	717
2016	266
2017	270
2018	271
Thereafter	797,027
Total debt	$	799,284

The Company incurred gross interest expense of $16.2 million and $8.5 million for the three months ended January 31, 2014 and 2013, respectively, of which $0.5 million was amortization of deferred financing costs for both periods. The Company had no capitalized interest during the three months ended January 31, 2014 and 2013. The Company incurred gross interest expense of $32.3 million and $16.9 million for the six months ended January 31, 2014 and 2013, respectively, of which $1.0 million was amortization of deferred financing costs for both periods. The Company had no capitalized interest during the six months ended January 31, 2014 and 2013.


5.	Acquisitions

Canyons

VR CPC and Talisker entered into the Transaction Agreement, the Lease and ancillary transaction documents, pursuant to which the Company assumed the resort operations of Canyons mountain resort in Park City, Utah, which includes the ski area, property management and related amenities effective May 2013. Canyons is a year round mountain resort providing a comprehensive offering of recreational activities, including both snow sports and summer activities. The Lease between VR CPC and Talisker has an initial term of 50 years with six 50-year renewal options. The Lease provides for $25 million in annual fixed payments, which increase each year by an inflation linked index of CPI less 1%, with a floor of 2% per annum. In addition, the Lease includes participating contingent payments to Talisker of 42% of the amount by which EBITDA for the resort operations, as calculated under the Lease, exceeds approximately $35 million, with such threshold amount increased by an inflation linked index and a 10% adjustment for any capital improvements or investments made under the Lease by the Company (the "Contingent Consideration"). The Parent Company has guaranteed the payments under the Lease.

F-9

The following summarizes the preliminary estimated fair values of the identifiable assets acquired and liabilities assumed at the date the transaction was effective (in thousands).



	Estimates of Fair Value at Effective Date of Transaction
Accounts receivable	$	1,774
Other current assets	1,766
Property, plant and equipment	5,475
Property, plant and equipment (under capital lease)	127,885
Deferred income tax assets, net	44,744
Intangible assets	30,700
Park City Mountain Resort ("PCMR") deposit	57,800
Goodwill	74,539
Total identifiable assets acquired	$	344,683
Accounts payable and accrued liabilities	$	7,348
Deferred revenue	1,134
Other liabilities	21,766
Canyons obligation	305,335
Contingent consideration	9,100
Total liabilities assumed	$	344,683

The estimated fair values of assets acquired and liabilities assumed in the Canyons transaction are preliminary and are based on the information that was available as of the transaction date to estimate the fair value of assets acquired and liabilities assumed. The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company is obtaining additional information necessary to finalize those fair values, including a complete evaluation of the deductibility of goodwill for income tax purposes. Therefore, the preliminary measurements of fair value reflected are subject to change. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the transaction date.

Land and certain improvements under the Park City Mountain Resort ski area are subject to on-going litigation. The Company has recorded a deposit ("PCMR deposit") for potential future interests in the land and associated improvements at its estimated fair value. The excess of the aggregate fair values of assets acquired and liabilities assumed was recorded as goodwill. The goodwill recognized is attributable primarily to expected synergies, including the potential inclusion of a portion of the ski terrain of Park City Mountain Resort in the Lease, the assembled workforce of Canyons and other factors. The preliminary measurements of fair value assume that the majority of the goodwill is not deductible for income tax purposes. The intangible assets have a weighted-average amortization period of approximately 50 years. The operating results of Canyons which are recorded in the Mountain and Lodging segments contributed $22.7 million and $27.8 million of net revenue, including an allocated portion of season pass revenue based on skier visits, for the three and six months ended January 31, 2014, respectively. As of January 31, 2014, there were no changes to the Contingent Consideration liability.

The following presents the unaudited pro forma consolidated financial information of the Company as if the Canyons transaction was completed on August 1, 2012. The following unaudited pro forma financial information includes adjustments for (i) depreciation on acquired property, plant and equipment; (ii) amortization of intangible assets recorded at the date of the transaction; and (iii) interest expense relating to the Canyons obligation. This unaudited pro forma financial information is presented for informational purposes only and does not purport to be indicative of the results of future operations or the results that would have occurred had the transaction taken place on August 1, 2012 (in thousands, except per share amounts).

F-10



	Three Months Ended January 31,		Six Months Ended January 31,
	2013		2013
Pro forma net revenue	$	440,024	$	560,648
Pro forma net income (loss) attributable to Vail Resorts, Inc.	$	54,419	$	(16,393	)
Pro forma basic net income (loss) per share attributable to Vail Resorts, Inc.	$	1.52	$	(0.46	)
Pro forma diluted net income (loss) per share attributable to Vail Resorts, Inc.	$	1.48	$	(0.46	)

Urban Ski Areas

In December 2012, the Company acquired all of the assets of two ski areas in the Midwest, Afton Alps in Minnesota and Mount Brighton in Michigan, for total cash consideration of $20.0 million, net of cash assumed. The purchase price was allocated to identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The Company recorded $17.8 million in property, plant and equipment, $1.0 million in other assets, $2.0 million in goodwill, $1.0 million in other intangible assets (with a weighted-average amortization period of 10 years), and $1.8 million of assumed liabilities on the date of acquisition. The operating results of Afton Alps and Mount Brighton are reported within the Mountain segment.


6.	Supplementary Balance Sheet Information

The composition of property, plant and equipment follows (in thousands):



	January 31, 2014			July 31, 2013			January 31, 2013
Land and land improvements	$	349,532		$	343,982		$	289,127
Buildings and building improvements	906,658			884,307			854,130
Machinery and equipment	701,293			646,102			598,944
Furniture and fixtures	275,016			259,693			257,496
Software	99,262			92,553			92,473
Vehicles	55,146			49,356			48,307
Construction in progress	13,244			49,102			15,423
Gross property, plant and equipment	2,400,151			2,325,095			2,155,900
Accumulated depreciation	(1,212,362		)	(1,155,807		)	(1,098,501		)
Property, plant and equipment, net	$	1,187,789		$	1,169,288		$	1,057,399

The composition of accounts payable and accrued liabilities follows (in thousands):



	January 31, 2014		July 31, 2013		January 31, 2013
Trade payables	$	76,575	$	61,364	$	63,914
Deferred revenue	140,156		93,759		117,812
Accrued salaries, wages and deferred compensation	33,243		27,946		30,838
Accrued benefits	22,755		19,787		21,870
Deposits	32,788		14,331		26,411
Accrued interest	7,912		8,018		7,896
Other accruals	55,779		44,314		48,763
Total accounts payable and accrued liabilities	$	369,208	$	269,519	$	317,504

F-11

The composition of other long-term liabilities follows (in thousands):



	January 31, 2014		July 31, 2013		January 31, 2013
Private club deferred initiation fee revenue	$	130,241	$	131,760	$	133,432
Unfavorable lease obligation, net	32,702		34,037		34,723
Other long-term liabilities	77,283		77,109		62,002
Total other long-term liabilities	$	240,226	$	242,906	$	230,157

7. Variable Interest Entities

The Company is the primary beneficiary of four employee housing entities (collectively, the “Employee Housing Entities”), Breckenridge Terrace, LLC, The Tarnes at BC, LLC, BC Housing, LLC and Tenderfoot Seasonal Housing, LLC, which are variable interest entities (“VIEs”), and has consolidated them in its Consolidated Condensed Financial Statements. As a group, as of January 31, 2014, the Employee Housing Entities had total assets of $28.6 million (primarily recorded in property, plant and equipment, net) and total liabilities of $63.4 million (primarily recorded in long-term debt as “Employee Housing Bonds”). The Company’s lenders have issued letters of credit totaling $53.4 million under the Company's senior credit facility (“Credit Agreement”) related to Employee Housing Bonds. Payments under the letters of credit would be triggered in the event that one of the entities defaults on required payments. The letters of credit have no default provisions.

The Company is the primary beneficiary of Avon Partners II, LLC (“APII”), which is a VIE. APII owns commercial space and the Company currently leases substantially all of that space. APII had total assets of $4.4 million (primarily recorded in property, plant and equipment, net) and no debt as of January 31, 2014.

8. Fair Value Measurements

The Financial Accounting Standards Board ("FASB") issued fair value guidance that establishes how reporting entities should measure fair value for measurement and disclosure purposes. The guidance establishes a common definition of fair value applicable to all assets and liabilities measured at fair value and prioritizes the inputs into valuation techniques used to measure fair value. Accordingly, the Company uses valuation techniques which maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value. The three levels of the hierarchy are as follows:

Level 1: Inputs that reflect unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities;

Level 2: Inputs include quoted prices for similar assets and liabilities in active and inactive markets or that are observable for the asset or liability either directly or indirectly; and

Level 3: Unobservable inputs which are supported by little or no market activity.

The table below summarizes the Company’s cash equivalents and Contingent Consideration (see Note 5) measured at fair value (all other assets and liabilities measured at fair value are immaterial) (in thousands):

F-12




	Fair Value Measurement as of January 31, 2014
Description	Balance at January 31, 2014		Level 1		Level 2		Level 3
Description	Balance at January 31, 2014		Level 1		Level 2		Level 3
Assets:
Money Market	$	9,023	$	9,023	$	—	$	—
Commercial Paper	$	630	$	—	$	630	$	—
Certificates of Deposit	$	630	$	—	$	630	$	—

Liabilities:
Contingent Consideration (Note 5)	$	9,100	$	—	$	—	$	9,100

	Fair Value Measurement as of July 31, 2013
Description	Balance at July 31, 2013		Level 1		Level 2		Level 3
Assets:
Money Market	$	34,029	$	34,029	$	—	$	—
Commercial Paper	$	630	$	—	$	630	$	—
Certificates of Deposit	$	630	$	—	$	630	$	—

Liabilities:
Contingent Consideration (Note 5)	$	9,100	$	—	$	—	$	9,100

	Fair Value Measurement as of January 31, 2013
Description	Balance at January 31, 2013		Level 1		Level 2		Level 3
Assets:
Money Market	$	19,025	$	19,025	$	—	$	—
Commercial Paper	$	10,626	$	—	$	10,626	$	—
Certificates of Deposit	$	630	$	—	$	630	$	—

The Company’s cash equivalents are measured utilizing quoted market prices or pricing models whereby all significant inputs are either observable or corroborated by observable market data. The Company used discounted cash flow projection valuation models and Level 3 inputs to estimate the fair value of Contingent Consideration in connection with the Canyons transaction.

9. Commitments and Contingencies

Metropolitan Districts

The Company credit-enhances $8.0 million of bonds issued by Holland Creek Metropolitan District (“HCMD”) through an $8.1 million letter of credit issued under the Company’s Credit Agreement. HCMD’s bonds were issued and used to build infrastructure associated with the Company’s Red Sky Ranch residential development. The Company has agreed to pay capital improvement fees to Red Sky Ranch Metropolitan District (“RSRMD”) until RSRMD’s revenue streams from property taxes are sufficient to meet debt service requirements under HCMD’s bonds, and the Company has recorded a liability of $1.8 million primarily within “other long-term liabilities” in the accompanying Consolidated Condensed Balance Sheets, as of January 31, 2014, July 31, 2013 and January 31, 2013, respectively, with respect to the estimated present value of future RSRMD capital improvement fees. The Company estimates that it will make capital improvement fee payments under this arrangement through the year ending July 31, 2028.

Guarantees/Indemnifications

As of January 31, 2014, the Company had various other letters of credit in the amount of $58.7 million, consisting primarily of $53.4 million in support of the Employee Housing Bonds and $3.4 million for workers’ compensation and general liability deductibles related to construction and development activities.

In addition to the guarantees noted above, the Company has entered into contracts in the normal course of business which include certain indemnifications under which it could be required to make payments to third parties upon the occurrence or non-occurrence of certain future events. These indemnities include indemnities to licensees in connection with the licensees’

F-13

use of the Company’s trademarks and logos, indemnities for liabilities associated with the infringement of other parties’ technology and software products, indemnities related to liabilities associated with the use of easements, indemnities related to employment of contract workers, the Company’s use of trustees, indemnities related to the Company’s use of public lands and environmental indemnifications. The duration of these indemnities generally is indefinite and generally do not limit the future payments the Company could be obligated to make.

As permitted under applicable law, the Company and certain of its subsidiaries have agreed to indemnify their directors and officers over their lifetimes for certain events or occurrences while the officer or director is, or was, serving the Company or its subsidiaries in such a capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that should enable the Company to recover a portion of any future amounts paid.

Unless otherwise noted, the Company has not recorded any significant liabilities for the letters of credit, indemnities and other guarantees noted above in the accompanying Consolidated Condensed Financial Statements, either because the Company has recorded on its Consolidated Condensed Balance Sheets the underlying liability associated with the guarantee, the guarantee is with respect to the Company’s own performance and is therefore not subject to the measurement requirements as prescribed by GAAP, or because the Company has calculated the fair value of the indemnification or guarantee to be immaterial based upon the current facts and circumstances that would trigger a payment under the indemnification clause. In addition, with respect to certain indemnifications it is not possible to determine the maximum potential amount of liability under these potential obligations due to the unique set of facts and circumstances that are likely to be involved in each particular claim and indemnification provision. Historically, payments made by the Company under these obligations have not been material.

As noted above, the Company makes certain indemnifications to licensees in connection with their use of the Company’s trademarks and logos. The Company does not record any liabilities with respect to these indemnifications.

Self Insurance

The Company is self-insured for claims under its health benefit plans and for the majority of workers’ compensation claims, subject to stop loss policies. The self-insurance liability related to workers’ compensation is determined actuarially based on claims filed. The self-insurance liability related to claims under the Company’s health benefit plans is determined based on analysis of actual claims. The amounts related to these claims are included as a component of accrued benefits in accounts payable and accrued liabilities (see Note 6, Supplementary Balance Sheet Information).

Legal

The Company is a party to various lawsuits arising in the ordinary course of business. Management believes the Company has adequate insurance coverage and/or has accrued for loss contingencies for all known matters that are deemed to be probable losses and estimable. As of January 31, 2014, July 31, 2013 and January 31, 2013, the accrual for the above loss contingencies was not material individually and in the aggregate.

10. Segment Information

The Company has three reportable segments: Mountain, Lodging and Real Estate. The Mountain segment includes the operations of the Company’s ski resorts/areas and related ancillary services. The Lodging segment includes the operations of all of the Company’s owned hotels, RockResorts, NPS concessionaire properties, condominium management, CME and mountain resort golf operations. The Real Estate segment owns and develops real estate in and around the Company’s resort communities. The Company’s reportable segments, although integral to the success of each other, offer distinctly different products and services and require different types of management focus. As such, these segments are managed separately.

The Company reports its segment results using Reported EBITDA (defined as segment net revenue less segment operating expenses, plus or minus segment equity investment income or loss), which is a non-GAAP financial measure. The Company reports segment results in a manner consistent with management’s internal reporting of operating results to the chief operating decision maker (the Chief Executive Officer) for purposes of evaluating segment performance.

Reported EBITDA is not a measure of financial performance under GAAP. Items excluded from Reported EBITDA are significant components in understanding and assessing financial performance. Reported EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income (loss), net change in cash and cash equivalents or other financial statement data presented in the Consolidated Condensed Financial Statements as indicators of financial performance or liquidity. Because Reported EBITDA is not a measurement determined in accordance with GAAP and thus is susceptible to varying calculations, Reported EBITDA as presented may not be comparable to other similarly titled measures of other companies.

F-14

The Company utilizes Reported EBITDA in evaluating performance of the Company and in allocating resources to its segments. Mountain Reported EBITDA consists of Mountain net revenue less Mountain operating expense plus or minus Mountain equity investment income or loss. Lodging Reported EBITDA consists of Lodging net revenue less Lodging operating expense. Real Estate Reported EBITDA consists of Real Estate net revenue less Real Estate operating expense. All segment expenses include an allocation of corporate administrative expenses. Assets are not allocated between segments, or used to evaluate performance, except as shown in the table below.

The following table presents financial information by reportable segment which is used by management in evaluating performance and allocating resources (in thousands):



	Three Months Ended January 31,						Six Months Ended January 31,
	2014			2013			2014			2013
Net revenue:
Lift	$	195,357		$	175,658		$	195,357		$	175,658
Ski school	46,930			41,723			46,930			41,723
Dining	32,602			29,826			40,066			36,199
Retail/rental	85,717			83,748			114,616			110,473
Other	31,050			30,786			52,018			49,600
Total Mountain net revenue	391,656			361,741			448,987			413,653
Lodging	56,187			46,543			113,401			99,051
Total Resort net revenue	447,843			408,284			562,388			512,704
Real estate	4,877			14,167			13,723			26,097
Total net revenue	$	452,720		$	422,451		$	576,111		$	538,801
Operating expense:
Mountain	$	243,512		$	220,997		$	368,286		$	328,545
Lodging	53,259			44,803			110,164			96,609
Total Resort operating expense	296,771			265,800			478,450			425,154
Real estate	8,006			16,739			17,237			32,353
Total segment operating expense	$	304,777		$	282,539		$	495,687		$	457,507
Mountain equity investment income, net	$	14		$	99		$	617		$	533
Reported EBITDA:
Mountain	$	148,158		$	140,843		$	81,318		$	85,641
Lodging	2,928			1,740			3,237			2,442
Resort	151,086			142,583			84,555			88,083
Real estate	(3,129		)	(2,572		)	(3,514		)	(6,256		)
Total Reported EBITDA	$	147,957		$	140,011		$	81,041		$	81,827

Real estate held for sale and investment	$	184,101		$	216,815		$	184,101		$	216,815

Reconciliation to net income (loss) attributable to Vail Resorts, Inc.:
Total Reported EBITDA	$	147,957		$	140,011		$	81,041		$	81,827
Depreciation and amortization	(36,204		)	(33,418		)	(70,360		)	(65,097		)
Loss on disposal of fixed assets, net	(1,044		)	(531		)	(1,473		)	(533		)
Investment income, net	70			99			165			153
Interest expense	(16,239		)	(8,534		)	(32,337		)	(16,909		)
Income (loss) before (provision) benefit from income taxes	94,540			97,627			(22,964		)	(559		)
(Provision) benefit from income taxes	(35,340		)	(37,098		)	8,727			485
Net income (loss)	$	59,200		$	60,529		$	(14,237	)	$	(74	)
Net loss attributable to noncontrolling interests	63			22			124			45
Net income (loss) attributable to Vail Resorts, Inc.	$	59,263		$	60,551		$	(14,113	)	$	(29	)

F-15

11. Stock Repurchase Plan

On March 9, 2006, the Company’s Board of Directors approved the repurchase of up to 3,000,000 shares of common stock and on July 16, 2008 approved an increase of the Company’s common stock repurchase authorization by an additional 3,000,000 shares. During both the three and six months ended January 31, 2014 and 2013, the Company did not repurchase any shares of common stock. Since inception of its stock repurchase program through January 31, 2014, the Company has repurchased 4,949,111 shares at a cost of approximately $193.2 million. As of January 31, 2014, 1,050,889 shares remained available to repurchase under the existing repurchase authorization. Shares of common stock purchased pursuant to the repurchase program will be held as treasury shares and may be used for the issuance of shares under the Company’s employee share award plan.

12. Guarantor Subsidiaries and Non-Guarantor Subsidiaries

The Company’s payment obligations under the 6.50% Notes (see Note 4, Long-Term Debt) are fully and unconditionally guaranteed on a joint and several, senior subordinated basis by substantially all of the Company’s consolidated subsidiaries (collectively, and excluding Non-Guarantor Subsidiaries (as defined below), the “Guarantor Subsidiaries”), except for Eagle Park Reservoir Company, Larkspur Restaurant & Bar, LLC, Black Diamond Insurance, Inc., Skiinfo AS and certain other insignificant entities (together, the “Non-Guarantor Subsidiaries”). APII and the Employee Housing Entities are included with the Non-Guarantor Subsidiaries for purposes of the consolidated financial information, but are not considered subsidiaries under the indenture governing the 6.50% Notes.

Presented below is the consolidated financial information of the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries. Financial information for the Non-Guarantor Subsidiaries is presented in the column titled “Other Subsidiaries.” Balance sheets are presented as of January 31, 2014, July 31, 2013, and January 31, 2013. Statements of operations and statements of comprehensive income (loss) are presented for the three and six months ended January 31, 2014 and 2013. Statements of cash flows are presented for the six months ended January 31, 2014 and 2013. As of January 31, 2013, the Company revised its classification of advances from affiliates in the amount of $446.3 million to present it separately in the Supplemental Condensed Consolidating Balance Sheet from advances to affiliates. The Company has determined that this revision is not material to the Supplemental Condensed Consolidating Balance Sheet. In addition, the Company revised its classification of accounts payable and accrued liabilities related to purchases of property, plant and equipment in the Supplemental Condensed Consolidating Statement of Cash Flows from a gross basis to a net basis for the six months ended January 31, 2013 (see Note 2, Summary of Significant Accounting Policies). The Company determined that this revision is not material to the Supplemental Condensed Consolidating Statement of Cash Flows.

Investments in subsidiaries are accounted for by the Parent Company and Guarantor Subsidiaries using the equity method of accounting. Net income (loss) of Guarantor and Non-Guarantor Subsidiaries is, therefore, reflected in the Parent Company’s and Guarantor Subsidiaries’ investments in and advances to (from) subsidiaries. Net income (loss) of the Guarantor and Non-Guarantor Subsidiaries is reflected in Guarantor Subsidiaries and Parent Company as equity in consolidated subsidiaries. The elimination entries eliminate investments in Other Subsidiaries and intercompany balances and transactions for consolidated reporting purposes.

F-16

Supplemental Condensed Consolidating Balance Sheet

As of January 31, 2014

(in thousands)

(Unaudited)



	Parent Company		100% Owned Guarantor Subsidiaries			Other Subsidiaries			Eliminating Entries			Consolidated
Current assets:
Cash and cash equivalents	$	—	$	197,363		$	7,913		$	—		$	205,276
Restricted cash	—		11,188			1,754			—			12,942
Trade receivables, net	—		53,833			3,840			—			57,673
Inventories, net	—		72,233			270			—			72,503
Other current assets	27,885		26,090			526			—			54,501
Total current assets	27,885		360,707			14,303			—			402,895
Property, plant and equipment, net	—		1,143,884			43,905			—			1,187,789
Real estate held for sale and investment	—		184,101			—			—			184,101
Goodwill, net	—		344,615			1,671			—			346,286
Intangible assets, net	—		100,116			19,344			—			119,460
Other assets	5,529		101,201			4,172			(9,459		)	101,443
Investments in subsidiaries	1,851,623		(5,134		)	—			(1,846,489		)	—
Advances to affiliates	—		538,318			3,116			(541,434		)	—
Total assets	$	1,885,037	$	2,767,808		$	86,511		$	(2,397,382	)	$	2,341,974
Current liabilities:
Accounts payable and accrued liabilities	$	6,549	$	353,215		$	9,444		$	—		$	369,208
Income taxes payable	39,543		—			—			—			39,543
Long-term debt due within one year	—		734			231			—			965
Total current liabilities	46,092		353,949			9,675			—			409,716
Advances from affiliates	541,434		—			—			(541,434		)	—
Long-term debt	390,000		350,812			57,507			—			798,319
Other long-term liabilities	27,673		211,424			10,588			(9,459		)	240,226
Deferred income taxes	79,771		—			(115		)	—			79,656
Total Vail Resorts, Inc. stockholders’ equity (deficit)	800,067		1,851,623			(5,134		)	(1,846,489		)	800,067
Noncontrolling interests	—		—			13,990			—			13,990
Total stockholders’ equity	800,067		1,851,623			8,856			(1,846,489		)	814,057
Total liabilities and stockholders’ equity	$	1,885,037	$	2,767,808		$	86,511		$	(2,397,382	)	$	2,341,974

F-17

Supplemental Condensed Consolidating Balance Sheet

As of July 31, 2013

(in thousands)

(Unaudited)



	Parent Company		100% Owned Guarantor Subsidiaries			Other Subsidiaries			Eliminating Entries			Consolidated
Current assets:
Cash and cash equivalents	$	—	$	130,970		$	7,634		$	—		$	138,604
Restricted cash	—		10,890			1,734			—			12,624
Trade receivables, net	—		77,725			1,312			—			79,037
Inventories, net	—		68,101			217			—			68,318
Other current assets	25,190		18,475			1,221			—			44,886
Total current assets	25,190		306,161			12,118			—			343,469
Property, plant and equipment, net	—		1,124,004			45,284			—			1,169,288
Real estate held for sale and investment	—		195,230			—			—			195,230
Goodwill, net	—		347,078			1,746			—			348,824
Intangible assets, net	—		101,913			19,431			—			121,344
Other assets	6,057		96,337			4,332			(9,459		)	97,267
Investments in subsidiaries	1,861,509		(3,510		)	—			(1,857,999		)	—
Advances to affiliates	—		513,283			2,906			(516,189		)	—
Total assets	$	1,892,756	$	2,680,496		$	85,817		$	(2,383,647	)	$	2,275,422
Current liabilities:
Accounts payable and accrued liabilities	$	6,600	$	256,094		$	6,825		$	—		$	269,519
Income taxes payable	42,822		—			—			—			42,822
Long-term debt due within one year	—		775			219			—			994
Total current liabilities	49,422		256,869			7,044			—			313,335
Advances from affiliates	516,189		—			—			(516,189		)	—
Long-term debt	390,000		348,190			57,738			—			795,928
Other long-term liabilities	27,851		213,928			10,586			(9,459		)	242,906
Deferred income taxes	85,426		—			(42		)	—			85,384
Total Vail Resorts, Inc. stockholders’ equity (deficit)	823,868		1,861,509			(3,510		)	(1,857,999		)	823,868
Noncontrolling interests	—		—			14,001			—			14,001
Total stockholders’ equity	823,868		1,861,509			10,491			(1,857,999		)	837,869
Total liabilities and stockholders’ equity	$	1,892,756	$	2,680,496		$	85,817		$	(2,383,647	)	$	2,275,422

F-18

Supplemental Condensed Consolidating Balance Sheet

As of January 31, 2013

(in thousands)

(Unaudited)



	Parent Company		100% Owned Guarantor Subsidiaries			Other Subsidiaries		Eliminating Entries			Consolidated
Current assets:
Cash and cash equivalents	$	—	$	129,258		$	7,321	$	—		$	136,579
Restricted cash	—		10,979			1,215		—			12,194
Trade receivables, net	—		49,475			4,011		—			53,486
Inventories, net	—		70,095			246		—			70,341
Other current assets	27,586		20,988			1,059		—			49,633
Total current assets	27,586		280,795			13,852		—			322,233
Property, plant and equipment, net	—		1,010,349			47,050		—			1,057,399
Real estate held for sale and investment	—		216,815			—		—			216,815
Goodwill, net	—		269,875			1,887		—			271,762
Intangible assets, net	—		73,022			19,568		—			92,590
Other assets	6,573		41,469			4,367		(9,459		)	42,950
Investments in subsidiaries	1,788,271		(1,798		)	—		(1,786,473		)	—
Advances to affiliates	—		443,135			3,168		(446,303		)	—
Total assets	$	1,822,430	$	2,333,662		$	89,892	$	(2,242,235	)	$	2,003,749
Current liabilities:
Accounts payable and accrued liabilities	$	6,502	$	302,077		$	8,925	$	—		$	317,504
Income taxes payable	14,979		—